In its latest earnings call Thursday, Seattle-based online brokerage Redfin posted a 38 percent year-over-year increase in revenue to $370 million for full-year 2017, resulting in a net loss of $15.0 million for the year, an improvement over its $22.5 million loss in for 2016.
For the fourth-quarter 2017, Redfin reported a 43 percent increase in revenue year-over-year to $95.8 million, for a net loss of $1.8 million.
The report was Redfin’s third since going public last July. The company saw a gross profit of $29.2 million, up 37 percent from $21.3 million in the fourth quarter of 2016.
Of Redfin’s revenue, $5.1 million came from Redfin Now, its service that buys home directly from consumers. CEO Glenn Kelman provided updates about the branch of Redfin during the earnings call.
Redfin Now sold nearly all the homes it had purchased starting in January 2017 by the end of the year, with the rest under contract to sell by the end of this month, Kelman said.
Redfin Now had experimented with offering less for homeowners’ properties in an attempt to increase profits, but found that the strategy failed.
“It didn’t work. More homeowners rejected our offers,” Kelman said.
Redfin Now is back to paying a little more for owners’ homes and plans to increase its budget for purchases at any one time from $10 million to $20 million.
Redfin’s market share stayed steady from last quarter at 0.71 percent of U.S. existing home sales. The company plans to spend on advertising in 2018.
Redfin shares fell 7 percent after its report.
“Redfin’s 2017 was a year of break-out traffic growth and new products,” Redfin CEO Glenn Kelman said in a statement. “A major strategic shift toward representing sellers as well as buyers expanded our market presence and influence. Most important, we continued to serve our customers better by far than other brokers.”
“In the fourth quarter, Redfin continued to accelerate its year-over-year gains in market-share, with revenue and net income above our guidance, even as the real estate market began to wane in the closing months of 2017,” Kelman added. “We also strengthened our business at a more fundamental level, expanding Redfin Mortgage to new markets, launching a new premium service for home-selling customers, and shipping major upgrades to our agent software that we believe will over time improve both service quality and agent efficiency.”
